Category Archive 'Guild System'

14 Dec 2007

Amazon Forbidden to Offer Free Book Delivery in France

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The New York Times reports on how the medieval practice of the state defending the special interests of particular groups participating in the economy over the general interest continues to flourish in certain unenlightened European countries. may not offer free delivery on books in France, the high court in Versailles has ruled.

The action, brought in January 2004 by the French Booksellers’ Union (Syndicat de la librairie française), accused Amazon of offering illegal discounts on books and even of selling some books below cost.

The court gave Amazon 10 days to start charging for the delivery of books, which should at least allow the company to maintain the offer through the end-of-year gift-giving season. After that, it must pay a fine of €1,000 (US$1,470) per day that it continues to offer free delivery. It must also pay €100,000 in compensation to the booksellers’ union.

Retail prices, particularly of books, are tightly regulated in France.

Using “loss-leaders,” or selling products below cost to attract customers, is illegal. Other restrictions apply to books retailers must not offer discounts of more than 5 percent on the publisher’s recommended price. Many independent booksellers choose to offer this discount in the form of a loyalty bonus based on previous purchases. Larger booksellers simply slash the sticker price of books.

But the free delivery offered by Amazon exceeded the legal limit in the case of cheaper books, the union charged.

The union said it was pleased with the court’s ruling, which would help protect vulnerable small bookshops from predatory pricing practices.

This sort of thing exemplifies precisely the philosophical differences between the United States and Europe. The American idea is to attempt to limit the powers of government to serve special interests and to bear the inevitable discomforts and dislocations resulting from freedom and competition, based on the belief that voluntary human interactions produce more innovation, greater productivity, and lower costs, inevitably maximizing the prosperity of society as a whole. Europeans still commonly reject Liberalism and modernity, preferring state paternalism and arbitrary systems of protected status.

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